As complicated as the credit card processing industry can be, there are only 3 things you REALLY need to know.
#1 Understand The Rates
There are 500+ tiers of pricing when you combine all credit/debit card types. It is important to familiarize yourself not only with the pricing but also how the pricing relates to your specific business. Card pricing rates vary based on card type and how the cards are processed. Take some time getting to know both VISA INTERCHANGE and MASTERCARD INTERCHANGE rates. Remember that Interchange is the cost before any markups and before the costs or markups associated with capturing, authorizing, and settling each transaction. When you have a great understanding of the various card types and the actual costs, you can make better decisions related to your processing needs.
#2 Know Your Effective Rate & Most Likely Card Types:
Checking your monthly statement and calculating your overall effective rate can give you a good guideline to quickly verify that your rates are in line. Identifying any variations in your monthly effective rate can help you make sure your rates are accurate and error-free. The other thing to consider is the average size of the transaction that your business is likely to accept. For example - if your average ticket is less than $100, you are more likely to accept debit cards from your customers which happen to be amongst the lowest priced cards. If, on the other hand, your average ticket is over $250, you are more likely to accept the higher-priced rewards cards. Knowing this kind of information can really help you keep an educated eye on your monthly fees.
#3 Be Sure You Have a Worthy Partner/Processor
The importance of having a strong partner to handle your processing needs cannot be overstated. After all, you will be providing a ton of personal and sensitive business information in order to get your merchant account up and running and a strong partner can grow with you as your business progresses.
When you know the basics of the credit card processing industry and align yourself with a strong partner, you bypass all of the pitfalls and negative issues associated with credit card processing and you are free to focus on the things that will truly make your business grow.
